I've got both (actually, the missus now uses my C3) & the answer is yes, the 3N is better but not massively so. It's definitely an incremental upgrade as opposed to a step change. The single biggest improvement isn't IQ, but the fact that the 3N doesn't discharge the battery when powered down - a real bugbear with the C3.

Note that the 3N never got a full firmware update to support the SELP1650 - it does work but you need to set the lens compensation to auto yourself, and obviously there is no zoom lever, so you need to use the one on the lens.